This article about Infosys humble beginnings in Pune is heartwarming. Many people today are concerned about the trends toward “offshore” outsourcing of development. I have a different perspective than most, and often find myself trying to explain. Here I’ll try to outline my thinking:
First, I have heard complaints about offshore programmers come equally from non-citizens (on work visas) as from citizens. While outsourcing may seem a positive sign for people from countries positively helped, it is almost universally seen as a negative by those on work visa, who regard the trend as a threat to their jobs. There is some irony in this, because the trend to offshore development has been propelled in part by the past few years of political lobbying to reduce work visas for high-tech foreigners. I have opined in past years on this blog that limiting work visas would be a terrible idea, and even severed my association with one professional organization ten years agobecause of its lobbying against professional work visas. The recent congressional moves against professional working visas forced much premium talent from Silicon Valley to return home to India and China, where these alumni of the tech bubble have seeded domestic industries. Anyone who thinks that the buildup of domestic talent in these places will not be important, need look no further than Taiwan and small electronics design for an example of how the center of gravity can shift overnight for technology expertise. India has moved increasingly higher on the software value chain in a very short amount of time, and it is not at all difficult for me to imagine a day when the competence will no longer exist in America (to the extent that we can convince ourselves that any brilliant “competence” ever existed at all).
Next, while I see the trend as continuing almost inevitably, I differ with others on what significance we should read. As far as I can recall, one of the “holy grail” goals that the industry (and especially Microsoft) have been chasing is to make programming so productive that programmers can spend much less of their time writing and debugging code. The ideal that we sometimes joke about is the “Powerpoint Compiler”, that can take the business guy’s Powerpoint demos and turn them automatically into running code. Even if outsourcing reduces the human cost of running code by 50%, this is still a very poor substitute for the “Powerpoint Compiler”, and not yet where we want to be as an industry. Basically, I am making an argument against the scarcity mentality that so many people seem to have implicitly. The activity of writing code is currently a big part of the overall software pie, but the pie is not fixed in size — we are nowhere near the point of having tapped the full potential of software, and to the extent that we can shrink the costs of development, we can redirect resources toward activities which grow the potential of software to produce value. Software, like all good technology, allows a small number of people to provide value to a relatively large number of people — ever since the invention of agriculture, humans have consistently pushed the amount of “leverage”. For example, when America was founded, something like 90 out of each 100 people was employed full time in the system to produce food for the nation. Now the ratio is something like 1 out of 100 (or lower). Nobody complains that the farming jobs are gone, since everyone realizes that farming jobs are not a zero-sum game. The key to realize is that all technology is like this, and sometimes it is a good thing when it takes less resources to produce the same value. The earth could not even come close to supporting the current human population if we all insisted on keeping our jobs hunting, gathering, and growing,
Finally, I differ with most people about what should be the sociopolitical response. In the past, people concerned about offshore programmers have blamed the government. When the government complies by restricting work visas, and it backfires by driving the jobs overseas, certain people blame the “greedy corporations” and request that the government place restrictions on the companies. Who knows what will happen next? I really don’t know what the perfect solution is, but I lived through the downsizing of the “Big 3” and saw firsthand the “Buy America” campaigns, intimidation of people who bought foreign cars, and so on. In the end, I do not believe that these attitudes did much to help things. The loss of automotive jobs was a first-class tragedy, and ruined careers, families, and even cities. But blaming the government, greedy corporations, and consumers did not really help. In fact, I think that government protectionism and corporate penalization actually worsened the situation quite a bit; not the least because such focus diverts from what I think is the real root cause. For the past twenty years,while a changing economy and technology have dictated that we should increase the level of education of the workforce, we have seenthe educational achievement of working-age citizens decline. We do have the world’s best advanced educational institutions, but the majority of advanced science and math degrees are awarded to foreign nationals. Obviously, not everyone needs to be a science or math genius, but this is a competetive world economy and people who don’t have these skills are certainly not going to be in any position to push the frontiers and create the next industry segments as old ones mature and are taken over by low-cost providers. One would think that a responsible government would be doing everything possible to increase the density of skilled people (including more competitive education, fast-track citizenship for skilled and highly-educated foreign workers)and stack the odds in our favor. Instead, I get the impression that it’s easier for politicians to get votes by telling students “it’s not your fault that you are being out-competed, it’s really the fault of the corporations and the incumbents”. Education is not a passive thing that happens to a student, and the more that students realize that their ultimate competitiveness lies within themselves, the more they will be prepared to push the value curve instead of falling for scarcity thinking — and ultimately that benefits everyone.
Note that my thoughts on the issue are not hardened; posting things on my blog and discussing with people helps me to think thoroughly. For example, when discussing over Christmas break, my brother pointed out that strong intellectual property protections are just as important as education to creating a healthy ecosystem that can sustain technology growth. This truth is highlighted by the Scoble comment, “I find it ironic that Slashdot is worrying about offshoring of programming. These are the same folks who cheer everytime a country like Israel or China chooses to go with free software over software written in America that costs money. Nice to know they care.” In fact, I believe that the recent China government moves toward Red Flag Linux are calculated in part to encourage a stronger domestic software industry (as I have opined on this blog a number of times, to “reduce the dependence on foreign software”) and will be successful at least in the short term in fostering domestic expertise. In other words, I do not believe that lack of IP restrictions (and lack of enforcement) in China or India will significantly hamper growth of the domestic industry in the short term, and in fact may help. I still don’t buy that our current IP situation (99 years for Mickey Mouse?) is actually helping us, any more than it would be smart to deport anyone who failed to get higher than 1600 on SAT. But I certainly agree that anything we can do to encourage domestic competence and encourage innovation is preferable to the protectionism that seems so popular these days.